SWOT-analysis of Tesla Inc.

Promotion of the brand in many aspects depends on the organization of the marketing researches which helps the marketers and managers to determine what strengths can be used for the creation of the competitive advantage. Today many markets are characterized by the strict competition and businesses must take into account what opportunities they will have entering the market and what threats they will meet from the current and new players. SWOT-analysis is one of the effective instruments for measuring four components important for the company’s success on the market. They are strengths, weaknesses, opportunities, and threats.

1. Tesla Inc. profile

Tesla Inc. is a designer and manufacturer of the fully electric vehicles, energy generation and storage systems. The Company operates in several major segments. They include “Automotive”, “The Energy Generation”, and “Storage” segments. Tesla Inc. was established in 2003 by Martin Eberhard and Marc Tarpenning, the American entrepreneurs. The company received the name after the famous inventor Nikola Tesla. The major concept lying in the idea of Tesla Inc. establishment was design and development of the electric sports cars. The first electric car “Roadster” from Tesla Inc. was released in 2008. The company also expanded its activity in the sector of manufacturing of the solar energy products in 2015. In 2016 Tesla Inc. purchased the solar panel company “SolarCity”. In 2017 it changed the name to Tesla Inc., accordingly the company began to manufacture not only electric cars but also energy generation and storage systems. Tesla Inc. revenues steadily grew since 2008 (Fig. 1.1):

Fig. 1.1. Tesla Inc. revenues from 2008 to 2019.
*composed by the author based on data of Wagner (Wagner, 2020).

According to Figure 1.1, in 2008 Tesla Inc. generated $14.74 mln, and this value increased to $2.457,00 mln.

2. SWOT-analysis of Tesla Inc.

As argued by Daniel, Tesla Inc. is a company that changed the traditional thinking about the US automotive industry. In particular, it started to manufacture energy and solar technologies that contributed to its branding (Daniel, 2020). In order to ensure customers the best quality and modern design, the core focus of the company is innovation. Tesla Inc. designs the cars taking into account the visions how the electric cars and other vehicles will look like in the forthcoming years and what customers will expect from their design and functionality. For example, already today the company developed innovative models of Tesla Semi, Cybertruck, Tesla Roadster and others. Tesla Inc. manufacture is oriented on the mass market and its cars are associated mostly with family cars. People with families are the major target audience on the market, thus the company covers wide range of target consumers.

Among the weaknesses, it is necessary to note that the Tesla Inc. spends “zero dollars” on their promotional and marketing campaigns. Relying on the public attention is not always enough for the company to retain target consumers and attract new buyers. The company challenges strict competition from the giant automotive manufactures like General Motors, Ford, Toyota, Volkswagen and others. According to, DeBord, Tesla Inc. lacks about $300 bln in value compared with its competitors (DeBord, 2020). As claimed by Salinas, Tesla Inc. major weakness is problems with customer services. The scholar calls is “company’s Achilles’ heels”. According to the annual surveys the number of satisfied customers reduced from 85% to 80% during 2018. Approximately 42% of Tesla Inc. target customers describe their buying and service experience as excellent. The major issue of concern is necessity to wait for appointments long. Especially, the weak customer service is observed outside the United States (Salinas, 2019). In the opinion of Michael Wayland, the company has the problems with quality of its vehicles (Wayland, 2020). According to the scholar, most of the owners of Tesla cars reported about the problems with their use during the first 90 days after the purchase. It was the highest level of negative reports compared with 31 companies which the scholar studied.

Tesla has a lot of opportunities to improve its competitive advantage and increase its market share. In particular, the company is going to build factories which will ensure the entire process of the automobile production. Expansion of manufacturing facilities can make Tesla Inc. production more sustainable and independent on the external supplies that potentially can contribute to the decrease of prices on the end product. Earlier the company relied mostly on one factory located in Fremont, California. In addition, Tesla Inc. has opportunity to expand its market share in the segment of eco-friendly cars (Fru, 2019).

Among the threats of the company, there is still the threat of sales reduction. As it is known, Tesla’s cars are expensive, and in case of the households’ incomes reduction, the profits of the company can reduce. For example, during Covid-19 pandemic outbreak which hit the United States, the unemployment rate significantly increased, while the incomes dropped. Therefore, people spend more on food and health care products rather than on the purchase of a new car.

SWOT-analysis of Tesla Inc.

manufacture of energy and solar technologies together with cars; focus on innovation; – accounting future perspectives; – targeting families;– strict competition from giant automotive manufactures; – problems with customer services; – lack of high quality;
– expansion of the manufacturing facilities; – reduction of the prices for end product; – expansion of segment of eco-friendly cars;– risk of sales reduction as a result of households’ incomes drop and unemployment rate increase.

Having summarized the above-said, Tesla Inc. remains one of the successful automotive manufacturers worldwide. SWOT-analysis shows that the company pays much attention to the support of innovation strategies and provides cars for mass market. The company should invest more in the marketing and improve the level of customer service quality. Establishment of new factories will help Tesla Inc. to make its manufacturing process more sustainable that contribute to the reduction of prices on the end products of the company. It is especially important in the times of economic crisis caused by Covid-19 pandemic outbreak.

Daniel. (2020, February 5). Innovation is Good Marketing: Tesla Brand Review. Retrieved September 28, 2020, from Brandastic: https://brandastic.com/blog/marketing-tesla-brand-review/
DeBord, M. (2020, August 1). Tesla has a huge lead over other automakers. See how the electric-car company’s brand became so mighty. Retrieved September 28, 2020, from Business Insider: https://www.businessinsider.com/why-tesla-has-a-huge-lead-over-competitors-elon-musk-2020-7
Fru, K. (2019, April 17). Tesla SWOT Analysis: Is Debt the Company’s Major Threat? Retrieved September 28, 2020, from https://pestleanalysis.com/tesla-swot-analysis/#Tesla_SWOT_Analysis_%5BOpportunities%5D_The_development_of_new_gigafactories
Salinas, S. (2019, March 11). Tesla’s biggest problem is its customer service, according to a new Bernstein survey. Retrieved September 28, 2020, from CNBC: https://www.cnbc.com/2019/03/11/teslas-biggest-problem-is-customer-service-new-bernstein-survey.html
Wagner, I. (2020, March 3). Tesla’s revenue 2008-2019. Retrieved September 27, 2020, from Statista: https://www.statista.com/statistics/272120/revenue-of-tesla/
Wayland, M. (2020, January 24). Tesla lags auto industry in quality, finds new J.D. Power study. Retrieved September 28, 2020, from CNBC: https://www.cnbc.com/2020/06/24/tesla-lags-auto-industry-in-quality-finds-new-jd-power-study.html#:~:text=Tesla’s%20issues%2C%20according%20to%20Betts,noise%3B%20and%20squeaks%20and%20rattles.


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